A South Salem resident filed a petition against the Katonah-Lewisboro school board asking for overcollected taxes to be returned to taxpayers.

In the document served in early June, petitioner Johannes Wille stated that the district accumulated an estimated extra $808,500 from taxpayers for the 2012-13 academic year. Instead of returning the money to residents in the form of a reduction for the 2013-14 tax levy, it was marked as a budget surplus and put into the district’s reserve fund.

In the event of a surplus, if a district does not provide residents with a tax reduction the following year, said Mr. Wille, it means those residents are paying for a fund or reserve that can be spent in the future even if those taxpayers have since moved out of the district.

“In five years from now there will be taxpayers who will have left the district who are entitled to that money,” said Mr. Wille, a retired resident whose two children graduated from the district, in a phone interview on Monday. “The people who moved into the district will not be entitled to it because they never paid it. That is the real issue here.”

The petition also stated that a year-end audit on June 30, 2013, included the $808,500 in a new liability reserve. However, that reserve “was not created during the 2012-13 audit period and therefore should not have legally been included in the audit,” according to Mr. Wille. The creation of the insurance reserve was ratified by the school board on Sept. 12, 2013, which was 2 1/2 months after the close of the 2012-13 school year.

“The board of education willfully ignored its legal obligation to monitor fund balance and calculate in a reasonable time its true June 30, 2013 fund balance,” Mr. Wille wrote in the June 4 petition. “The board of education withheld at least $808,500 in additional 2012-2013 surplus from the 2013-2014 levy and parked this enormous amount in an ill-advised and unnecessary Insurance Reserve effective June 30, 2013 that was itself funded illegally by the September 12, 2013 resolution.”

Mr. Wille, who spent 48 years working in accounting and finance, said that a school board can legally set its reserves before the end of the fiscal year, not after. The Katonah-Lewisboro school board established its liability reserve long after the 2012-13 fiscal year closed.

“This is the people’s money,” said Mr. Wille. “The board wants people to support education and that’s fine, I am all for education, but I am not for wasting money or setting up bogus reserves that you do not need.”

Setting up extra reserves is not the way to control tax increases, according to Mr. Wille.

According to previous decisions made by the state education department’s commissioner, which Mr. Wille cited in his petition, “if surplus funds are to be used to establish a reserve fund, the reserve fund should be created before the tax levy” and “a school district cannot hold surplus funds indefinitely in anticipation of establishing a reserve fund” — both of which the Katonah-Lewisboro school board did, he said.

In addition, Mr. Wille said the school board is supposed to create a budget that avoids a surplus as that creates an “undue burden” on taxpayers. Nevertheless, there was an $808,500 surplus for the 2012-13 year, which was placed illegally in a new fund 74 days after the fiscal year closed.

“Hopefully, the state will order the school district to reverse it and return the money to the taxpayers,” said Mr. Wille. “I am hoping that the commissioner of education reviews it, tells the board that what they did was wrong, and that it is not needed.”

Katonah-Lewisboro school board president Charles Day said the board was correct in moving the $808,500 into the liability reserve but that the timing of the reserve’s creation might be an issue. He said the school board was not trying to “steal money from taxpayers” and the liability reserve was justifiable.

He said the liability reserve was created based on a need following the switch in the district’s health care from a self-insured plan to a state premium-based plan, which was done in the spring of 2013. He added that the school board moved the money into the liability reserve at the suggestion of its auditors.

“We are on pretty firm ground that this was the right thing to do,” Mr. Day said in a phone interview on Monday. “I was worried if we did something wrong, and it is pretty clear we did not. We did it at the suggestion of our auditors; our auditors told us how to make the transfer. We thought we needed those reserves, and we still think we need them.”

Mr. Day admitted that the reserve’s creation could have been done sooner but said the board did not think there was any urgency. He said it was filed late because there were several other matters at the end of the year that needed to be dealt with. He added that timing was not an issue in the past, although he could not recall another time when the school board created a reserve following the fiscal year’s deadline.

“We didn’t think that the timing was an issue,” said Mr. Day. “We still don’t think that timing is an issue. It might be that the timing is an issue, and if it is, we will know it for next time … The commissioner could say that the timing on this is wrong, in which case we will do it earlier next year. It is a very technical point.”

Mr. Day added that all school board members were made aware of the petition. The board has until June 25 to answer the petition.

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